Britain’s economy probably shrank in the fourth quarter, tipping it closer to a triple-dip recession, according to an estimate from the National Institute of Economic and Social Research.
Gross domestic product fell 0.3 percent in the period after rising 0.1 percent in the three months through November, the London-based institute, whose clients include the Bank of England and the U.K. Treasury, said in a statement today.
Niesr said the estimate for fourth-quarter GDP is “distorted due to an artificially high level of output” in the third quarter, when the London Olympics boosted growth. “Removing these distortions suggests an underlying economic performance that is best described as flat,” it said.
The estimate follows data today showing industrial production rose less than economists forecast in November and manufacturing unexpectedly fell. While the U.K. economy emerged from a recession in the third quarter, the recovery has yet to gain traction.
Niesr also said that Britain’s economy probably stagnated in 2012 after growing 0.9 percent the previous year. Economists in a Bloomberg News survey in December forecast expansion of 1.1 percent in 2013 following a contraction of 0.1 percent last year.
The Bank of England’s Monetary Policy Committee left its bond-buying program on hold at 375 billion pounds ($604 billion) yesterday. It will have new economic and inflation forecasts at its next policy meeting in February.